Royal Dutch Shell and the UK’s offshore regulators have renewed talks over the the Jackdaw gas field development in the North Sea, reported Reuters.

The move comes amid struggles by the government due to mounting gas and power prices, company and industry sources told the news agency.

A Shell spokesperson said: “We continue to work with the regulator to explore options around developing the Jackdaw field.”

Last week, Minister of State for energy, clean growth and climate change Greg Hands said in a tweet that talks were held with the oil company about the future of gas production and the North Sea transition deal.

Sources with knowledge of the discussions told the news agency that the Jackdaw field development was among the priorities on the agenda.

Shell and the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) are trying to come to an agreement to enable the transportation of natural gas from the Jackdaw field to the St. Fergus onshore terminal, near Peterhead, in Scotland.

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By GlobalData

The company had earlier planned to extract and burn the unwanted CO₂ from the gas on the Shearwater platform and transport the treated gas, via new pipeline, onshore.

Shell’s plan was later rejected by OPRED, which also offered the firm an alternative plan to transport the untreated gas to the St Fergus terminal, via the nearby Judy field. The captured CO₂ could then be flared at the terminal.

The recent weeks have seen Secretary of State at the Department of Business, Energy and Industrial Strategy Kwasi Kwarteng laying repeated emphasis on the importance of the UK North Sea oil and gas industry.

This comes despite pressure from environmentalists to cut down the country’s reliance on fossil fuels.

In a separate announcement, Shell closed the previously announced stake sale in the Deer Park refinery in the US, to partner Petroleos Mexicanos (Pemex), in a deal worth $596m.